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Thursday, October 2, 2008

Why do startups have to depend on VC money? Doesn't anyone make bootstraps anymore?

Good News, Startups: You're Not Screwed:"Will there be less money available for startups? I have met with 5 firms in the past 2 weeks, and I am not sensing any change in attitude from experienced Series A investors. If you have a 10 person internet company looking for VC money and an investor says he is nervous about the markets, than he is either blowing you off or doesn't know what he is doing. Your company won't hit its stride or profits until 2010 at the earliest - NO-ONE has any idea what 2010 will look like but the odds are we will emerge from any 2008-09 problems by then.

VC as an asset class has not gotten any less attractive to pension funds and other huge investors in the past month - in many ways it has gotten better since many other classes of assets simply relied on leverage to get outsized returns. So your VC should not be starved for cash."

Sure, this is awfully tongue-in-cheek - but there's this strange attitude being taught at business schools which is contrary to most Main Street start-up strategies...